US weekly jobless claims fall; many unemployed losing benefits

WASHINGTON: The number of Americans filing new claims for unemployment benefits fell more than expected last week, but remained very high as the labour market recovery shows signs of strain amid a relentless Covid-19 pandemic and ebbing fiscal stimulus.

While other data on Thursday showed home sales racing to a more than 14-year high in September, economic activity is slowing heading into the fourth quarter. A measure of the economy's prospects increased moderately last month.

The slow and uneven recovery from the worst economic downturn in at least 73 years and uncontrolled coronavirus crisis could cost Republican President Donald Trump a second four-year term in the White House when Americans vote on Nov. 3. Trump is trailing former Vice President and Democratic Party candidate Joe Biden in national opinion polls.

Initial claims for state unemployment benefits dropped 55,000 to a seasonally adjusted 787,000 for the week ended Oct. 17. Data for the prior week was revised to show 56,000 fewer applications received than previously reported.

Economists polled by Reuters had forecast 860,000 claims in the latest week. California, the most populous state in the nation, resumed the processing of new applications after a two-week pause in late September to combat fraud.

Unadjusted claims fell 73,125 to 756,617 last week. Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state jobless programs, 1.1 million people filed claims last week.

First-time claims have been stuck above their 665,000 peak during the 2007-09 Great Recession, though they have declined from a record 6.867 million in March. A more than $3 trillion rescue package early this year provided a lifeline for many businesses, allowing them to keep workers on payrolls. It also lifted economic activity from the recession, which started in February.